Public Bill Committee

[David Taylor in the Chair]

Clause 19

Quality contracts schemes

Amendment moved [this day]: No. 47, in clause 19, page 17, line 40, after ‘increase’, insert ‘of 10%’.—[Stephen Hammond.]

David Taylor: I remind the Committee that with this we are discussing the following amendments: No. 48, in clause 19, page 17, line 44, after ‘relates’, insert
‘, which are substantially greater than those that would pertain under a quality partnership scheme,’.
No. 49, in clause 19, page 17, line 47, after ‘authorities’, insert
‘substantially more than would a quality partnership scheme’.
No. 50, in clause 19, page 18, line 4, leave out from beginning to end of line 8 and insert—
‘(e) there are shown to be no adverse effects of the proposed scheme on operators or on persons living or working in the area to which the proposed scheme relates.’.
No. 51, in clause 19, page 18, line 8, at end insert—
‘(2A) In subsection (1)—
“economic” means that the cost of implementing the proposed scheme to the local authority will be no greater than implementing the same services under any other means;
“efficient” means that the proposed scheme will be no less efficient than if the same services were implemented under any other means;
“effective” means that the proposed scheme will be no less effective than if the same services were implemented under any other means.’.
No. 52, in clause 19, page 18, line 19, after ‘services’, insert ‘by 10%’.

Stephen Hammond: Good afternoon, Mr. Taylor. At our previous sitting, Lady Winterton said that it was going to be a happy morning, and I am sure that this will be a happy afternoon.
Before lunch, I was going through the last of my amendments—No. 50—in which we ask the Minister for an indication of what she regards as proportionate. What proportion do the Government have in mind? Who decides what it will be? Where is the definition? If a service is withdrawn as a result of a quality contracts tendering process, people will lose out, so I want the Government to tell us exactly how they will measure what appears to be a potential financial loss on one side and a lifestyle benefit on the other.

Clive Betts: On the hon. Gentleman’s theme of how he will kill off quality contracts before they begin, let me take up the point that the hon. Member for Lewes was trying to make before lunch. Amendment No. 50 removes proportionality and instead uses the words
“there are shown to be no adverse effects of the proposed scheme on operators or on persons living or working in the area”.
That must mean that if any person or operator experiences an adverse effect, it will rule out a quality contract and any of the benefits to any other person or operator—one adverse effect experienced by one person or operator would rule out the whole scheme.

Stephen Hammond: I am trying to probe exactly what the Minister means by proportionate.

Clive Betts: Am I right?

Stephen Hammond: I do not know what proportionate means. If it means what the hon. Gentleman suggests, then yes, but someone must tell me what it means. We phrased the amendment as we did so that we could ask the Minister exactly why her initial criteria are phrased in such a way.
To return to my starting point, the five criteria set out in my amendments explore and define the quality contracts criteria. On that basis, I look forward to the Minister’s response.

Norman Baker: Good afternoon, Mr. Taylor. I shall try to be brief, given the time that we took this morning. It is unfair of the Government Whip to accuse Labour Back Benchers of filibustering—they raised some serious points this morning, and it is only right to pay due tribute to them for doing so.

David Taylor: Order. We are wasting time this afternoon. Will the hon. Gentleman proceed?

Norman Baker: I do not blame the hon. Member for Wimbledon for tabling his amendments, in the sense that it is perfectly proper to test the wording of the clause. If they were implemented, however, the amendments would wreck the quality contracts system, intentionally or otherwise. The word “substantially” in amendment No. 49 suggests that the hurdle would be set at 10 per cent., which would be a very high hurdle indeed. Similarly, as the hon. Member for Sheffield, Attercliffe said a second ago, and as I said before lunch, amendment No. 50 would give operators a veto, allowing any scheme to be ruled out if there were any adverse effects whatever. That is the absolute definition of a wrecking amendment, and I cannot believe that it is what the hon. Member for Wimbledon wanted—but perhaps it was.
This morning, the hon. Gentleman criticised the use of the words
“any adverse effects of the proposed scheme”
in clause 19(2)(e). He went on to ask how the Government would define adverse effects, but he uses the same words in his amendment. If he wanted to demonstrate that there would be no adverse effects, he would presumably have to define the phrase as used in his amendment.
To conclude, the amendments do not stack up, other than as a means of wrecking the quality contracts scheme in total.

Rosie Winterton: Good afternoon, Mr. Taylor. It is nice to see you back in Committee.
As hon. Members have spotted, the amendments raise hurdles that local authorities would have to get over before they could introduce a quality contracts scheme. They would increase the burden of proof to such an extent that it would be practically impossible to meet. I shall say a few words about how the Bill amends the requirements of proof that local authorities have to meet before taking forward a quality contracts scheme.
As I said, there are circumstances when the public interest may be best served by a quality contracts scheme; for example, partnership may be failing to deliver the improvements needed, or local authorities may want to be able to guarantee a particular set of improvements to the bus network. The Government’s objective in the Bill is to make quality contracts schemes a more realistic option for local authorities, where they believe it the right thing to do in their area. We have listened to concerns that the existing legislation is too restrictive. The Bill will put that right.
The effect of the amendments proposed by the hon. Member for Wimbledon, however, would be to raise the burden of proof that the local authority has to meet to such an extent as to make it almost impossible to meet. The amendment proposing that there must be no adverse effects at all on any bus operators or any person living or working within the area of the scheme is particularly unrealistic.
I want to address the issue of proportionality, which we introduced following representations made by local authorities and others over the draft Bill. They preferred the criterion introduced to be a proportionality test, rather than a competition test. Local authorities are experienced at that, particularly in the context of other transport schemes—getting the balance right between what the financial benefits and costs of a scheme would be, and the lifestyle gain. Local authorities are used to assessing through proportionality the eventual benefits of a scheme.
I accept that in many cases quality contracts schemes may not be the answer to everyone’s problems, but as a Government we believe that they should be a realistic option for communities that want them. The amendments would take that option further away from local authorities and, for that reason, we cannot accept them.

Stephen Hammond: I am disappointed in the Minister’s response.
I am interested in the right hon. Lady’s argument on proportionality. Will she be helpful and send us some correspondence that defines exactly what it is? She says that local authorities are well versed in proportionality, but some examples of where it has been used before, or what the Government guidelines to local authorities are, would be helpful. Can the Minister help us on that point?

Rosie Winterton: We have said that we want to respond positively to the points made to us by local authorities. One of the suggestions of the Passenger Transport Executive Group, for example, was for the competition test to be made a more general proportionality test, as part of the proposed public interest test. Under that test, the quality contracts scheme promoter would be required to demonstrate that the effect on bus operators was justified by the public interest legitimate purpose in introducing a quality partnership scheme—a fair, balanced test. That would assist in demonstrating compliance with human rights legislation and is what we responded to. Of course, any guidance we issue will address and build on the work that local authorities already undertake when they draw up particular transport schemes. We will look at proportionality testing then. I hope it reassures the hon. Gentleman when I say that, through guidance, we will assist local authorities with bringing about that test.

Stephen Hammond: I am grateful for the Minister’s comments. I shall look closely at the guidance on proportionality. Obviously, she has told us what PTEG would prefer. I have been trying to obtain a definition of what proportional is and although we do not have it yet, I am happy to accept that the Minister says there will be guidance on it. I do not, therefore, intend to press amendment No. 50 to a vote, as I indicated that I might wish to do.
Returning to my point, we are in favour of voluntary or statutory quality partnerships, but it must be shown that a quality contract provides a substantially greater benefit than could have been achieved under a quality partnership, so I would like to test the will of the Committee on amendments Nos. 47 and 48.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 11.

Question accordingly negatived.

Amendment proposed: No. 48, in clause 19, page 17, line 44, after ‘relates’, insert:
“, which are substantially greater than those that would pertain under a quality partnership scheme,”.—[Stephen Hammond.]

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 11.

Question accordingly negatived.

Norman Baker: I beg to move amendment No. 155, in clause 19, page 18, line 2, after ‘efficient’, insert ‘, environmentally sustainable’.
I shall truncate my comments to be helpful to the Committee—not because I feel that this is not an important amendment, but because we have already had a similar argument on an earlier amendment. Clause 19(2)(d) sets criteria that have to be met, and refers to the three E’s: economic, efficient and effective. It does not mention the fourth E, which relates to the environment. My amendment would add the words “environmentally sustainable” to the requirement placed upon local transport authorities that are drawing up quality contracts schemes. With the Climate Change Bill going through Parliament and when tackling climate change is one of the greatest priorities, it is bizarre—to say the least—that the environment is not even mentioned in the key criteria that are to be addressed.
I hope and anticipate that when the Bill is enacted, local authorities and others will seek to use powers under it relatively soon, and that they will take decisions, for example, to source particular vehicles. If they are not guided toward making sound environmental choices at an early stage, there is a real danger that the wrong choice will be made at an early stage, and we could end up with less sustainable vehicles and other environmental downsides. The amendment would prevent that.

Greg Knight: I can see the hon. Gentleman’s point, but does he accept to some extent the criticism that the amendment would be otiose, and that no vehicle manufacturer in the world is making new vehicles that are more polluting than a previous generation of vehicles? Every vehicle manufacturer is reducing pollution. It could be argued that if the amendment were accepted, any vehicle could be seen as environmentally unsustainable. He could be lifting the hurdle that he accused my hon. Friend the Member for Wimbledon of lifting when we debated a previous group of amendments.

Norman Baker: That is a novel argument. Of course modern vehicles are less polluting—that is a good direction of travel—but some vehicles are less polluting than others. For example, electric vehicles operate in some places. I went to see some extremely efficient and good public service vehicles being produced by a company called Modec. There is a difference between vehicles that are less polluting and vehicles that are still less polluting. I wish to encourage the latter. It is not only about vehicles. It might also be about information points at bus stops, for example, which could be powered by solar cells. Other aspects of environmental performance could be affected by how local authorities address their duties under the clause.
We discussed the approvals board this morning and what power it might have to overturn decisions by local transport executives—ITAs, councils or whatever they are called in the circumstances. If a duty is not written in to the Bill to deal seriously with the environment, what is to stop an approvals board saying, “You are wrong to put all these conditions about the environment into a plan; they are not in the criteria in the Act, and we therefore think that they are not in the public interest”? If the approvals board interprets local councils’ plans, we ought to ensure that local councils have protection in the Bill. It would be sensible and far-sighted to include some reference to the environment in the key criteria in the clause.

Rosie Winterton: I understand the hon. Gentleman’s concern and his desire to ensure that the Bill is environmentally sustainable. I wholeheartedly agree that that should be a key objective of local authorities’ policy and plans. He has probably anticipated my remarks, but for two reasons I do not think that adding his words to the criteria that must be satisfied before making the quality contracts scheme would be the best way of achieving that objective.
First, as we have discussed, the Bill includes general provisions to ensure that environmental issues are high on the agenda of local transport authorities. As I said when we discussed amendments to clause 8, we place certain duties on local transport authorities when developing and implementing transport policies, which include taking into account Government policies and guidance on the protection or improvement of the environment. An authority seeking to make a quality contracts scheme must, among other things, show that the scheme will contribute to the implementation of its transport policies in a way that is economic, efficient and effective. An authority working up proposals for a scheme would need to do so in such a way as to ensure that the scheme was consistent with those policies. It will be under a duty with regard to environmental issues in developing the policies, so such issues will be an important consideration in the development of the scheme.
Secondly, specific consideration of the environmental impact of quality contracts schemes should be included in supporting guidance, rather than in the Bill. I give an assurance that that will be the case. Environmental sustainability is a complex subject and the guidance provides a better vehicle, if I may use that phrase, for a more detailed discussion of the issues that authorities might need to consider.
A draft version of the quality contracts guidance, which is before the Committee, was issued in December. That draft already says that the scheme should take account of wider impacts on the environment. Environmental benefits such as reductions in carbon emissions and noise can be quantified as part of the economic appraisal required for a quality contracts scheme.
As I have said, we will publish revised guidance for consultation later this year, alongside draft regulations setting out the new procedures for quality contracts schemes. I assure the hon. Gentleman that we will consider in that context what more we can say regarding consideration of the environment when developing quality contracts schemes. I hope that that reassures him and that he will therefore withdraw the amendment.

Norman Baker: One day a Minister will accept one of my amendments. It has been 11 years and I am still waiting for the first one to be accepted—this is a very good one, as a matter of fact. I am grateful for the Minister’s comments as far as they go. I appreciate that she recognises the importance of the environment. The difference between us is that I regard it as a first-tier responsibility that should rank alongside “economic, efficient and effective”, rather than a second-tier responsibility that is subject to guidance, which is how I perceive it to be classed. However, I made my point under a previous amendment on clause 8 and I divided the Committee then. I do not feel the need to do so again, although my reasons have not changed, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

David Taylor: I call Mr. Stringer to move amendment No. 104, with which it will be convenient to consider amendment No. 194.

Graham Stringer: I am satisfied that the area that the amendment covers was debated this morning, so I am happy not to move it.

David Taylor: Amendment not moved.

Norman Baker: On a point of order, Mr. Taylor. What is the position of amendment No. 194, which is in this group?

David Taylor: Does the hon. Gentleman wish to move amendment No. 194?

Norman Baker: I should like to make one or two brief comments on it. I will move it for the purpose of then withdrawing it. All I wanted to be clear on was that the issues, because of the grouping—

David Taylor: Order. For the avoidance of doubt, I am very happy for the hon. Gentleman to speak to amendment No. 194.

Norman Baker: Thank you, Mr. Taylor. The only point that I wanted to make was this. As a result of the complicated grouping of the amendments, there are issues relating to amendment No. 194 that I should like to refer to, but I think that it is more appropriate that I refer to them under clause 23 and amendment No. 157. I wanted to give you notice that I intend to do so. If there is no objection to that, I shall discuss amendment No. 194 at that point. I have no wish to press it to a vote.

David Taylor: For the convenience of the Committee, could the hon. Gentleman say whether he intends to speak to amendment No. 194 or not?

Norman Baker: Having made those comments, I am happy not to speak to it, Mr. Taylor.

Clause 19 ordered to stand part of the Bill.

Clause 20

Notice and consultation requirements

David Taylor: I call Mr. Stringer to move amendment No. 106.

Graham Stringer: I do not propose to move this amendment, Mr. Taylor.

David Taylor: Amendment not moved.

Stephen Hammond: I beg to move amendment No. 53, in clause 20, page 18, line 28, leave out from ‘publish’to ‘a’.

David Taylor: With this it will be convenient to discuss the following amendments: No. 54, in clause 20, page 18, line 31, leave out ‘and’ and at end insert—
‘( ) supply a copy of that document to—
(i) the chief fire officer for each fire area covering the whole or part of that area,
(ii) the head of the local ambulance service for each area covering the whole or part of that area,
(iii) all persons living within 150 metres of any part of the route as specified in the proposed scheme,
(iv) representatives of local groups representing disabled people,’.
No. 146, in clause 20, page 19, line 21, at end insert—
‘(4A) In subsection (3) after paragraph (f) insert—
“(g) either operators of rail services which are provided within the authority’s area or organisations appearing to the authority to be representative of such operators,
(h) any relevant rail infrastructure manager, and”.’.
No. 209, in clause 30, page 27, line 9, leave out from ‘publish’ to ‘a’.
No. 210, in clause 30, page 27, line 12, leave out ‘and’ and insert—
‘(ba) supply a copy of that document to—
(i) the chief fire officer for each fire area covering the whole or part of that area,
(ii) the head of the local ambulance service for each area covering the whole or part of the area,
(iii) all persons living within 150 metres of any part of the route as specified in the proposed continuation of the scheme,
(iv) representatives of local groups representing disabled people, and’.

Stephen Hammond: I want to discuss amendments Nos. 53 and 54. The clause deals with the consultation document to be issued by the local authority that wants to implement a quality contracts scheme. Previously, as governed by the Transport Act 2000, such local authorities were required to issue a notice of the proposed scheme in at least one newspaper in the relevant area. The notice would describe the proposed scheme, state where a copy of it may be inspected and the reasons for wishing to make it. The authorities were then required to consult various people.
The Local Transport Bill slightly amends such requirements inasmuch as it states that the authority must now supply a consultation document to the same list of people as mentioned in the relevant section of the 2000 Act. That will have the effect of making the process in some ways more formal and defined, and certain things must therefore be included in the consultation document. My amendments would address those small, yet important, points in relation to the consultation process.
The local authority is required to publish the consultation document
“in such a matter as they think fit”.
Amendment No. 53 would remove those words, which I believe are unnecessary. The word “publish” is hardly open to misinterpretation, and surely it must mean to produce such information in either printed or electronic form. Given that the following subsections under the clause prescribe quite tightly what must be included in the consultation document, it is unlikely that an authority would be in a position to get it wrong or, indeed, to do anything other than in the manner that is prescribed, not
“in such a manner as they think fit”.
The amendment is really a tidying up proposal, and is saying that, given the high level of prescription and that we know the meaning of “publish”, the phrase to which I have referred is unnecessary.
Amendment No. 54 is important and says that the 2000 Act already sets out a list of those who need to be consulted as a result of the documentation being produced, which includes operators, other local authorities that might be affected, the traffic commissioner, the chief of police and, of course, includes the ubiquitous phrase “think fit”, which relates to other persons. The amendment is simple. Given that those people are prescribed, it would be important to prescribe in the Bill several others who must have the document. The chief fire officer, the head of the local ambulance service and people who live within 150 m of the relevant route as well as representatives of local groups for the disabled are all people who, for the sake of completeness, should be included in the consultation procedure. We have gone through the argument several times about such persons as an authority sees fit, but it is always more helpful to describe such people in the Bill. I hope that the Minister will accept amendments Nos. 53 and 54, which are minor proposals.

Norman Baker: I am sympathetic to the amendments. If we are to have a list that specifies several individuals, including the chief of police, it seems odd that others are not included. I appreciate the Minister’s argument that it is up to local authorities or others to judge who they think fit, but once we have started devising a list, it is difficult to argue that some people should be on it, while others should not. I see no reason why the chief of police should be on the list, but not others.
Amendment No. 146 draws attention to the failure to mention those responsible for rail services in the area. We are creating integrated transport authorities and it seems bizarre to have an integrated transport authority without a requirement to consider the railways as part of the quality contracts process. The amendment would tidy up such matters. Consulting rail operators would ensure that rail capacity development, delivery of timetables and so on, would be taken into account when designing a quality contracts scheme. That is important because if, for example, Network Rail or a train operating company has plans to significantly enhance a service, that is a relevant factor when deciding whether a quality contracts scheme should be pursued in the way that it was originally designed. Similarly, if there are plans to withdraw services, that may drive up the need for a quality contracts scheme. What the rail industry does is important and significant when deciding what should be in the quality contracts scheme.
There are other benefits. Discussions may take place as to how buses and trains should integrate, and that should be part of a quality contracts scheme. Once discussions in the rail industry have taken place, a quality contracts scheme may have a different content from what would otherwise have been the case. It is not efficient to say that a good ITA will automatically talk to the rail industry, because it may not.
There are only 15 council areas in England and Wales without a railway station, so it is virtually certain that we will need to ensure integration between rail and bus. It is sensible to send a clear message to those responsible for consultation requirements to ensure that the rail industry is properly consulted. The Minister may say that it would be odd if they were not consulted, but it is not in the Bill. It would be odd if the chief of police were not consulted—although not quite so odd as the rail industry—but the chief of police is in the Bill, so why should not the rail industry be there?

Greg Knight: If I may say so, I think that my hon. Friend the Member for Wimbledon did his argument a disservice by saying that this is a minor matter. I do not think that it is necessarily so. My remarks relate to amendment No. 53 because I am concerned with the wording that the Minister invites the Committee to embrace that says,
“(a) publish, in such a manner as they see fit, a consultation document.”
That could lead to publishing occurring only on the internet, thereby disfranchising all those who do not, or cannot, use IT equipment. I am concerned about that.
The other week I had a case in one of my advice surgeries where a person who has been transporting animals for over 20 years has been told that he must take a test to continue doing so. He was told that he must take that test on a computer. He does not own a computer, he is not computer-literate and he does not want to buy a computer for the purpose of taking the test. There is a movement, not only in private companies, but also in some arms of the Government, to try to force people to use the internet when, on some occasions, they do not wish to do so.
The duty to publish in the traditional way ought to remain, as this measure could disfranchise those members of a community at the poorer end of the scale who cannot afford to purchase a computer, or those who are elderly and feel that they cannot get to grips with the new technology. I realise that the clause goes on to say that notice must be given in at least one local newspaper, but that does not necessarily guarantee that details of the scheme will get across to those who might need to know. Last week in my constituency, I went into my local newsagent to buy a local newspaper and it had sold out. I represent a tourist area, where the population doubles when the weather is fine. No newsagent can budget for the demand produced by an influx of tourists.
There is a case for requiring publishing to take place in the traditional way of being printed on to paper and made available, so that people can see the full scope of what is proposed. I hope that the Minister will take the matter seriously. I am concerned that, if this wording remains, some persons may deem it appropriate to put it only on the website and leave it up to the public to go to the site to look at it. That is not good enough.

Rosie Winterton: As has been said, the amendments would expand the range of statutory stakeholders to be consulted on proposed new quality contracts schemes or proposals to continue existing ones. The Government recognise the importance of consulting a wide range of stakeholders. Provisions in the Transport Act 2000 already set out who must be consulted on proposals to make or continue a quality contracts scheme and those provisions are not changed by the Bill.
The existing provisions require local authorities to consult a wide range of interested parties, including all operators of local bus services in the affected area, other public service vehicle licence holders or holders of community transport permits who might be affected by the scheme; representatives of passengers, the local traffic commissioner and the chief police officer. The hon. Member for Lewes asked why the chief police officer is consulted, and not the chief fire or ambulance officer. The police have a direct responsibility for traffic management and enforcement, and that is why they have been named as a statutory consultee. However, we would expect the police service to take into account the requirements of other emergency services in their role as statutory consultee.
I take the point made by the right hon. Member for East Yorkshire. It is right that people who do not have access to the internet, for one reason or another, are not disempowered by any of the consultation processes. To come back to consulting rail bodies, it may well be that in areas where there is a quality contracts scheme that does not have any rail connections, such consultation might not be appropriate. I undertake to look into the issue that where rail is an integral part of the area there should be consultation with relevant rail operators and that when consulting, it is important for local authorities to remember and take account of the fact that not everybody has access to the internet.
I stress that there is an obligation on the local authority to consult such other persons as the authority or authorities think fit. As I said, in terms of particular schemes and depending on local circumstances, that may well include some or all of those listed in the amendment, but dealing with that issue through guidance is a better approach than the ever-expanding shopping list that we might otherwise get on the face of the Bill. Local authorities are best placed to determine who has a legitimate interest in their areas.

Greg Knight: The Minister has largely reassured me and I am pleased that she has responded so positively to the debate. Will the guidance be published, and therefore available for everyone to see in due course?

Rosie Winterton: The guidance will be published and consulted upon. We have already put out some draft guidance; we shall reissue that and undertake a proper consultation on it. There is also a consultation for making regulations.
The amendments also include local groups representing disabled persons among the list of those to be consulted. Again, I completely understand the spirit of the proposal, but I draw the Committee’s attention to the fact that an amendment made to the Bill in another place that we have already discussed will broaden the obligations on local authorities to have regard to the needs of disabled persons when developing and implementing local transport policies. I would expect representative groups to be consulted about proposed schemes. Again, we can cover the matter more fully in guidance.

Ian Stewart: It is good to see you in the Chair, Mr. Taylor. My hon. Friend heard me pass comment on the circumstances of consultation of disabled people and people with disabled interests in Salford. I am happy that it can be dealt with in guidance, as there is good practice out there that goes some way further than what is intended in the Bill. In Salford, Mr. Jim Wheelton of Salford Disabled Motorists and other community members with an interest in organisations for the disabled do not just scrutinise what the planning committee is doing; they take part in site visits with councillors. They can be seen regularly around Eccles constituency in the city of Salford. The Bill can build on good practice such as that.

Rosie Winterton: Once again, my hon. Friend is quite right. He is right to draw attention to best practice in his constituency, and I am sure that such examples will be helpful in drawing up guidance. On the basis of my reassurances, I hope that hon. Members will feel able to withdraw their amendments.

Stephen Hammond: When we discussed the Channel Tunnel Rail Link (Supplementary Provisions) Bill, I had a pleasant experience. The Minister heard my comments, came forward with reassurances, took my amendments away and went one stage further to bring them back as amendments on Report. I had intended to press amendments Nos. 53 and 54 to a vote, but I am happy to hear her reassurances. I hope that she will think again, particularly about amendment No. 53. Although I shall seek the Committee’s leave to withdraw it, I shall look carefully at the guidance and, if necessary, bring it back on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen Hammond: I beg to move amendment No. 55, in clause 20, page 18, line 39, leave out ‘reasons’ and insert ‘evidence indicating’.

David Taylor: With this it will be convenient to discuss the following amendments: No. 57, in clause 20, page 19, line 16, at end insert—
‘(c) an outline of the evidence of why the proposed scheme will provide a substantial improvement to the relevant service or services in comparison to the current service or services or the service or services that could be provided under a quality partnership scheme.’.
No. 211, in clause 30, page 27, line 28, at end insert—
‘(ca) a statement of the evidence demonstrating how continuing the scheme by means of a quality contracts scheme will provide a substantial improvement to the relevant service or services in comparison to the service or services that could be provided under a quality partnership scheme;’.

Stephen Hammond: Amendment No. 55 would ensure that the consultation document is a real document that can be responded to. The Bill says that authorities must state their reasons. I contend that the wording of that measure is open to manipulation and misinterpretation. The current criteria and the word “reasons” are subjective and difficult to quantify.
It is fair that people asked to respond to the consultation document should have the chance to assess all the relevant information put in front of them. Rather than having local authorities state subjective positions, consultation procedures should be open, fair and evidence-based. I therefore propose that the word “reasons” be replaced by the word “evidence”. The effect would be that the consultation document issued by the local authority would give a clear basis for how the decision was reached rather than simply stating what that decision was. Consultation can be effective only if it is based on facts and if people read those facts to make their decision. My amendment would therefore require local authorities—

Graham Stringer: Not for the first time in this or any other Committee, an hon. Member is reinventing the wheel. Why is it not good enough to get a commitment from the Minister, or even in the Bill, that the Cabinet Office guidelines on consultation must be followed? They are thorough and well understood.

Stephen Hammond: I will wait to hear what the Minister has to say in response, but as I was saying, this would put a requirement on local authorities to justify decisions by publishing the facts and evidence on which those decisions had been made. That is a reasonable and fair amendment.

Norman Baker: Does the hon. Gentleman accept that under the system proposed in the Bill, with the approvals board and the Transport Tribunal and so on, it will be in the interest of any transport authority to produce as much evidence as possible anyway, otherwise it will risk having its quality contracts overturned? Therefore, there is a self-fulfilling element to what local authorities will do here.

Stephen Hammond: The logic of the hon. Gentleman’s argument is therefore that he should support my amendment, because he would be happy with the word “evidence”. I assume that that is what he is prepared to do. This is a reasonable and fair amendment, and I hope the Minister agrees to it.

Rosie Winterton: Once again, these amendments illustrate the basic hostility of Conservative Front Benchers to the quality contracts schemes. The aim of these amendments is substantially to raise the burden of proof placed on local authorities to justify the reasons for proposing a quality contracts scheme in their consultation document. Government policy is to ensure that quality contracts schemes are a realistic option, and we agree that it is important to ensure that local authorities can justify the proposals to those directly affected by them and to their local communities. That is why the Bill requires an authority that proposes to make a quality contracts scheme to publish a consultation document.
The consultation document must describe the proposed scheme and the local authority must justify the proposals. In particular, the authority must explain why it is satisfied that the public interest criteria will be satisfied by the scheme. These amendments would raise that hurdle to an unacceptable level.
The intention of the Bill is to increase the range of options available to authorities to improve bus services in their area, but these amendments would increase the burden of proof in such a way as to make quality contracts an unattractive option for an authority to pursue. That would completely negate the improvements that we believe the Bill will make to the quality contracts scheme system.
The amendments show that Conservative Front-Bench Members do not believe that quality contracts should be introduced. They have said already that they would abolish them if ever there was another Conservative Government, and this is an illustration of that. We cannot accept the amendments, because they would undermine the system we are trying to introduce.

Stephen Hammond: The Minister tells us that she wants the consultation procedure to be fair and accurate and open, but she does not want to put any objectivity into that. That strikes me as a pretty odd way to behave. I am not at all reassured by her comments, so I shall press the amendment and test the will of the Committee.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 11.

Question accordingly negatived.

Question proposed, That the clause stand part of the Bill.

Stephen Hammond: I rise to speak on clause stand part because I want to question the Minister on a number of issues that we were not able to tackle in our extensive discussions on the amendments.
Included in the consultation document will be a declaration by the local authority finance officer on the financing of the quality contracts. The Government say that the chief finance officer must declare the costs of the scheme and say that those costs can be covered under the authority’s budget. That is a sensible and important provision, particularly as the likelihood is that the costs will not be insignificant. I think everyone accepts that, in a number of areas, budgets will be tight.
Paragraph (e) of proposed new subsection 1A says that the chief finance officer, in making a declaration on funding, must take account of estimated fare income and of grants to be received. I understand the point about future income, but I want to tease out some of the Minister’s thoughts on future expenditure, because such schemes have the potential to incur expenditure.
In addition to the costs of implementing the scheme, as we heard this morning, many people believe that there is a threat of legal action by operators that find themselves losing out in the process. This morning, I cited an article on the subject by a leading lawyer. Local authorities are already aware of the risk that operators may launch legal challenges. Indeed, Metro, West Yorkshire’s passenger transport authority, is already planning to test its powers under the Bill. Under the draft guidance on the quality contracts, it believes that if it were to try an incremental approach it would be less likely to prompt the introduction of a challenge to quality contracts under human rights legislation.
The Government’s thinking is unclear. Comments in various articles say that under human rights legislation there is the potential for court challenges to be made to quality contracts. The courts will need to examine the substance of the schemes and any legal advice given on them. The documentation says that the chief finance officer must take account of finances. Does the Minister expect the chief financial officer to take account of other specified matters, such as associated potential liabilities?
I say that because this morning a number of hon. Members said that they would want such cases to be subject to judicial review. We have to accept that possibility. It will be a lengthy process, and the costs and awards could be large. I do not advocate any one side; I genuinely want to find out whether the Minister will say in guidance that when finance officers talk about future income and future costs they must have regard to potential litigation. If so, do those future costs have to include the costs of litigation and the sums that might be awarded to operators?
This morning, an hon. Member—I forget who—pointed out that they believe some bus companies are greedy and will consider challenging the legislation on the basis of the restriction of trade, as well as considering the possibility of challenge under the Human Rights Act 1998. That is a real possibility. Sir David Rowlands said to the Public Accounts Committee:
“Under the Human Rights Act any legal entity is entitled to the quiet enjoyment of their own property and you may only override that in the public interest”.
We discussed the public interest this morning. He went on to say that
“therefore to move to quality contracts requires a strong public interest reason; it cannot be done simply because somebody would like to have quality contracts.”
In relation to clause stand part, I want the Minister to say what the Government’s position is. They appear to be saying that there is no liability in relation to compensation because, as a result of quality contracts, the bus operators will retain their assets. Is that genuinely the Government line? If it is, it seems to ignore two things that may be relevant: the issue of economic rent, which is the difference between the value of an asset being used for the purpose for which it was started and the value for the second best use of that asset, and the fact that there is good will associated with the operation of that asset, which the Government must recognise is also an asset that could be rendered valueless.
I am asking the Minister to tell us these things. First, as she knows, the Bill states that the chief financial officer will have to make a statement of future income. Will he also have to make comments about future expenditure, and will he have to qualify or at least attempt to qualify what liability there is? Is it the Government’s position that compensation is not an issue for operators and that it is unlikely to be given? I hope that the Minister can give the Committee some guidance on that practice.

Rosie Winterton: The hon. Gentleman makes the point that there is the risk of judicial review in certain circumstances. As he said, he read some legal advice that set out instances in which that might happen. That goes back to this morning’s discussion. We want an approvals board procedure and the ability to appeal to a transport tribunal, because that minimises the risk of judicial review. Therefore, the measures in the Bill mean that if a transport authority has properly followed the process of either making or continuing a scheme and the necessary criteria have been satisfied, we will not get into a situation in which there will be further litigation.
However, on the specific issue raised by the hon. Gentleman—whether the financial assessment of the scheme will include funding for litigation—it is probably true to say that a prudent authority will set aside some contingency funding for litigation, which might arise for a number of reasons. However, it is not reasonable to expect them deliberately to budget on the basis that they will be taken to court. It would be quite difficult to calculate the costs, and if the authority won a case it might recover all the costs.
In the circumstances, I am not sure that it would be helpful to pluck a figure out of the air and wave it in front of the public. Authorities have to take such risks in relation to litigation in many areas in which they work, but it is not necessarily appropriate for that to be put in the financial assessment of a scheme such as this.

Stephen Hammond: I am not suggesting that the chief financial officer of any particular area should stand up and say what he expects the cost of litigation to be, but in a number of areas there is a general health warning attached to a statement. I want to understand whether there will be in the statement a general warning that there is the potential for litigation and compensation. That is what I am trying to find out from the Minister.

Rosie Winterton: I think that authorities are aware of where there is potential for litigation. One of the difficulties with the current situation is that local authorities are worried about litigation and, as a result, feel that it is difficult for them to bring in quality contracts schemes. That is why we are trying to change the system to give greater protection to authorities in how they can make schemes, so that the risk is minimised.
As I said, I am sure that prudent authorities, when considering undertaking projects where there is any risk of litigation, will take that into account. That, frankly, is up to them. Part of how local authorities decide whether to press ahead with a scheme will be weighing up all the risks that they are likely to incur when doing so. I know that that is the process that many—or some—local authorities have gone through when looking at the issues around making quality contracts at the moment.
The hon. Gentleman asked about compensation for bus operators. We do not think that the issue is one where there should be compensation for bus operators. They will not be deprived of their assets. They will be free to deploy them elsewhere if, for example, they do not wish to tender for quality contracts or fail to win any tenders. Again, the public interest criteria that the local authority must satisfy include a proportionality test, so they will want to look at any adverse effects—for example, on local authorities—and satisfy themselves that that is proportionate to the improvements for people living and working in the area and to the achievement of the scheme objectives.
I can assure the hon. Gentleman that we will issue guidance to local authorities on applying that test. All the measures, taken together, will ensure that all operators have a fair opportunity to compete for the right to operate services in an area where a quality contracts scheme is set up. I hope that that explains the situation.

Norman Baker: I want to pursue a couple of points. That aspect of the Bill is important if local authorities are to have confidence—which many of us want them to have—in the Act that finally emerges.
On the compensation point raised by the Minister, the hon. Member for Wimbledon rightly referred to good will, which is an important issue to take into account. Historically, the Government have approached it in different ways. For example, under the Hunting Bill—if I dare mention it—no compensation was provided, because people still had their horses, stables and so on. On the other hand, when fur farming was made illegal, compensation was provided because the fur farmers lost their livelihood. Two different approaches have been adopted by the Government in recent times.

Graham Stringer: It was proportionate.

Norman Baker: That is the answer.
It will be perfectly possible for bus operators to feel aggrieved if they have built up a route through their own marketing and efforts—attracted passengers whom they did not have before—only for it to be taken away from them because of how the quality contracts work out. That is unlikely, however, because any sensible local authority will want to build it into any system. Nevertheless, the hypothetical possibility exists of someone losing what they have built up, and they will not get compensation. Still having their buses and garage will be of little consequence to them if they have lost their route and, perhaps, their livelihood. That might be the only route they operate, for example, which is an issue.
We must first address the natural justice aspect—I would like to hear the Minister’s comments on that—but we must also address the local authorities’ point of view and give them confidence that if action is taken, a robust legal defence will be available to them that they can be confident will work in the courts.
Pursuant to that, I am interested to know—not expressly today, but in broad terms—what guidance the Department for Transport intends to provide to local authorities on dealing with potential legal issues. I am not entirely happy with the Minister’s statement that it is up to them. If local authorities or ITAs pursue quality contracts in a way that is consistent with the Government’s intentions in the Bill, it will be wrong and unfair if they end up considerably out of pocket as a consequence of legal action. In such circumstances, will the Department for Transport feel obliged to support local authorities financially? That is an important point of principle—not just in terms of natural justice, but in giving local authorities some confidence and clarity on how the legislation will unfold.

Rosie Winterton: The point of this morning’s discussion on the approvals board and transport tribunals was that we want to set up a system that provides local authorities with greater certainty without huge cost. We want local authorities to be able to go through a process that will effectively agree that the public interest criteria and proportionality have been met.
The hon. Gentleman chose a particular instance involving an operator running down a perfectly well-running route that makes a profit and has lots of passengers. I believe that local authorities will take a sensible approach in such scenarios. That is why we have public interest criteria to ensure that schemes bring benefits to passengers and offer good value for money. If a local authority simply removes a well-running route, depriving passengers of buses and the scheme of that income, that, in a sense, would not satisfy the public interest criteria. It is about getting the balance right between the two.
To return to the hon. Gentleman’s point about the Department stumping up all the money for judicial review challenges, it is the role of the Government and the Department to set up a system that works well for local authorities, but it is then for the authorities to decide whether they wish to go down that route. As I said, it is quite difficult for local authorities. We know that judicial review can be expensive. That is part of the risk that they must take into account. I am sure that it is an incentive to ensure that schemes are robust.
No local authority will want to introduce a challengeable scheme that might cost it a lot of money. It will also not be appropriate for the Department to stand back and say, “Don’t worry, if it all goes wrong we’ll pay all the costs.” That would be ridiculous, so I cannot give the hon. Gentleman any comfort there. However, the aim of the Bill is to minimise the possibility of judicial review and to ensure that schemes are good value for money and fair to all concerned.

Question put and agreed to.

Clause 20 ordered to stand part of the Bill.

Clause 21

Approval of proposed scheme

Stephen Hammond: I beg to move amendment No. 58, in clause 21, page 19, line 36, leave out from ‘England’ to end of line 39 and insert
‘and Wales, an approvals board for England and Wales.’.

David Taylor: With this it will be convenient to discuss the following amendments: No. 59, in clause 22, page 20, line 3, after ‘England’, insert ‘and Wales’.
No. 60, in clause 22, page 20, line 4, leave out ‘for England’.
No. 63, in clause 23, page 21, line 3, after ‘England’, insert ‘Wales’.
No. 64, in clause 23, page 21, line 6, leave out ‘for England’.
No. 67, in clause 23, page 21, line 21, leave out ‘for England’.
No. 68, in clause 23, page 21, line 23, leave out ‘for England’.
No. 69, in clause 23, page 21, line 26, leave out ‘for England’.
No. 71, in clause 24, page 22, line 13, after ‘England’, insert ‘and Wales’.
No. 72, in clause 24, page 22, line 16, leave out ‘for England’.
No. 77, in clause 25, page 23, line 26, after ‘England’, insert ‘and Wales’.
No. 78, in clause 25, page 23, line 28, after ‘England’, insert ‘or Wales’.
No. 79, in clause 25, page 23, line 30, leave out ‘for England’.
No. 198, in clause 25, page 24, line 14, leave out ‘for England’.
No. 199, in clause 25, page 24, line 21, leave out ‘for England’.
No. 200, in clause 25, page 24, line 26, leave out ‘for England’.
No. 201, in clause 25, page 24, line 37, leave out ‘for England’.
No. 202, in clause 26, page 25, line 5, after ‘England’, insert ‘and Wales’.
No. 203, in clause 26, page 25, line 9, after ‘England’, insert ‘and Wales’.
No. 204, in clause 26, page 25, line 11, leave out ‘for England’.
No. 220, in clause 33, page 31, line 29, after ‘England’, insert ‘and Wales’.
No. 221, in clause 33, page 31, line 31, leave out ‘for England’.

Stephen Hammond: The good news is that although there are 13 amendments in the group, 12 are consequential, so I shall not delay the Committee for long. Today and previously, we have had extensive discussions about the approvals board. I expected much discussion to take place when we debated clauses 21 and 22, but a lot of it happened this morning.
If the Minister regards the board as so important, why does it apply to England only? Why will quality contracts in England be passed on to an approvals board when those in Wales will be examined by Welsh Ministers? Is it entirely because of the status of devolved legislation, or is there some other explanation? The Minister and the Government have reassured us that the process of appeal through an approvals board will limit judicial review, so it has the chance to become an effective and independent body. It will be well suited to decide the suitability of quality contracts, and I am not sure that the Committee would wish to deny such a body to Wales, unless there was good reason to do so.

Rosie Winterton: I certainly take on board what the hon. Gentleman has said about this being a probing amendment. It would extend the approvals board model to Wales and take away the existing role of Welsh Ministers. The Government consulted the Welsh Assembly Government on how the provisions will apply in Wales, and the Bill is consistent with their preferences, which is to say that the existing approval role will be retained by Welsh Ministers for schemes in Wales, and there will not be a move to independent approval.
In both cases, the approval process will be at arm’s length from the local authority or authorities that will approve schemes—that is a key feature of both models. However, in England, the Government see the value of having an approval process at arm’s length from the Secretary of State. As we have discussed, under the current arrangements, the Secretary of State has a quasi-judicial approval role at the end of the local authority process of scheme development. That makes it more difficult for Ministers or officials to engage with local authorities as they develop proposals for quality contracts schemes. We believe that we will work together more effectively if the Secretary of State is removed from the quasi-judicial approval process.
Obviously, Welsh Ministers take a different view, and many comments have been made on the reasons for that. There are those who have said that in Wales there is perhaps not quite the extensive demand for quality contracts schemes as there has been in England. However, it is important that it is up to the Welsh Assembly Government to ask for the process to be different if they so wish. With that explanation, I hope that the hon. Gentleman will not press the amendment to a Division.

Stephen Hammond: I am completely satisfied with that explanation. The Minister has obviously consulted Welsh Ministers and this is what they prefer, so far be it from me to interfere with their wishes. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 21 ordered to stand part of the Bill.

Clause 22

Approvals boards for England

Norman Baker: I beg to move amendment No. 156, in clause 22, page 20, line 9, at end insert
‘, one of whom shall be a representative of users of local transport.’.

David Taylor: With this it will be convenient to discuss amendment No. 62, in clause 22, page 20, line 33, at end insert—
‘( ) The Secretary of State shall at all times keep a panel of persons who may be appointed under subsection 2(b).
( ) The panel shall consist of at least 15 persons.
( ) Membership of the panel shall be open to any person who is considered to have relevant experience of the bus industry, passenger user groups or local transport governance.
( ) The persons who are to be appointed under subsection 2(b) are those that the Secretary of State considers most appropriate in all the circumstances of the particular case.’.

Norman Baker: We are back on the accountability or otherwise of the approvals board, and I make no apology for raising the concept of accountability yet again. The Government propose to set up a very powerful triumvirate, which in my view will be able to thwart the views of elected local councillors and the ITA. Incidentally, that situation will be remedied in a helpful manner if new clause 5, which we shall discuss shortly, is accepted, but as the Bill is currently set out, what I have described will be possible. In those circumstances, we should consider the membership of the approvals board more closely.
I support the concept of experts being able to examine some of the proposals to see whether they are robust and make sense, and to give advice. There seems to be nothing whatever wrong with that; in fact, it seems a sensible idea. The idea is that there should be a traffic commissioner, an expert in transport economics and an expert in transport planning. That seems to be a sensible mix of people who should be asked to offer views. However, it is not a complete mix of the people who should be asked to offer views. Noticeably missing from that list is anyone who might actually travel on a bus. There is no guarantee that transport economists or transport planners will travel on buses, but someone from Passenger Focus or another passenger group, whom I am suggesting should be incorporated into the membership of the approvals board, certainly would travel on a bus.
I accept that it is a worst-case scenario, but let me explain the danger we face. An ITA of elected people carefully considers and consults and comes up with proposals, which then go before the approvals board, whose members may be unaware, even if they should not be, of the particular local circumstances. They may not have travelled on a bus for quite some time and they might be unsympathetic to what the local authority or the ITA is trying to do. In those circumstances, having someone on the approvals board who has experience of riding a bus would be quite a good idea. If the Minister says that is not quite the right idea and a better way of doing it is A, B and C, that is fine, but the concept of expanding the approvals board to have wider expertise is clearly right.

Graham Stringer: It is unusual in British administrative law to put people whose role is normally quasi-judicial into positions of policy making. When the Select Committee considered those matters, we thought that it was inappropriate for a traffic commissioner to be part of the process, if indeed the process will exist. On that basis, will the hon. Gentleman reconsider his remarks or address that issue?

Norman Baker: I suppose that I am addressing the issue of the approvals board as I wish to see it, which is as a statutory consultee, as would be the case with the Environment Agency. That is the role that I would like the approvals board to have. If the approvals board carries on with its present powers, the hon. Gentleman makes quite a good case for looking again at the membership and whether the traffic commissioner would be double-hatted in that regard.
I shall comment briefly on the Conservative amendment No. 62. No doubt the hon. Member for Wimbledon will address it himself, but I have some sympathy with the point that he is trying to make. He seems to be addressing the same point as me, but by different means. The fact that we have come from different directions to the same conclusion should weigh heavily with the Minister.

Stephen Hammond: I am pleased that we have reached the same conclusion. The hon. Member for Manchester, Blackley made a very good point. Should someone with a policy-making role have a quasi-judicial role? Would that person be capable of separating those two roles when asked to do so? That is a decent issue that must be addressed, because it is a concern. My amendment is similar and I have a great deal of sympathy with the hon. Member for Lewes. At present, paragraph 2 of proposed new clause 126A of the Transport Act 2000 states that in addition to the traffic commissioner, there should be two other members sitting on the approvals board, and that they will be selected from a panel appointed by the Secretary of State. Clause 22 contains no further detail about the panel, which seems a significant omission. The four further paragraphs proposed by the amendment are designed to put some detail on who would be on the panel and how it would be selected.
A panel needs a number of people from which it can select, so a panel of 15 people would provide an appropriate number from whom an approvals board can be selected. That number should ensure that there are always two members with the requisite regional familiarity, wherever the quality contracts scheme is being proposed. The panel needs to be large enough to ensure availability in all sorts of cases.
The panel should also have relevant experience, which is why I have sympathy with what the hon. Member for Lewes was saying. The Secretary of State will presumably be able to judge what is relevant, but it should entail experience of the bus industry, passenger groups or local transport governance. The Bill would be substantially enhanced if it required the panel to include such people, as that relevant experience is extremely important. When appointing the two members of the panel to the approvals board, the Secretary of State should look at the qualifications and experience that render them most suitable, in much the same way as the senior traffic commissioner appoints the most appropriate traffic commissioner—we went through that argument last week. The Secretary of State ought to be looking to appoint the most appropriate persons from the pool available.
Taken together, the paragraphs should ensure that those charged with deciding whether a quality contract should occur are appropriately qualified to make that decision. They should be aware of passengers, the local bus industry and what might happen to the local authority. They should be able to judge in an impartial manner a consultation document produced by the local authority and make a judgment on the representations. The amendment is inspired by the fact that although the Bill goes into some detail about the traffic commissioner on the approvals board, and how they might be appointed, there is a noticeable absence about how the other two members will be appointed. This is an extremely important part of the legislation and it would be wrong to leave it vague and imprecise. I hope that the Minister will accept that there is a gap in the legislation that needs filling.

Rosie Winterton: As has been said, the Bill provides that an approvals board for England will consist of a traffic commissioner—the chair—and
“... two persons drawn from a panel of persons appointed by the Secretary of State for the purposes of this section.”
Amendment No. 156 would provide that one of the members of the panel should always be a representative of bus passengers. A lot of this goes back to our discussion earlier today about defining the remit of the approvals board.
There are two key issues when determining who should be on the approvals board for the role that we envisage. First, the board should have appropriate expertise and, secondly, the decision-making process should be fair, open and impartial. The board will be chaired by an independent traffic commissioner. We proposed in the draft Bill that it should be the senior traffic commissioner, but following the recommendation from the Transport Committee we changed it so that an approvals board would normally be chaired by the commissioner with the most appropriate knowledge of the area in question.
We also proposed that the traffic commissioner would be supported by two experts, most likely in transport planning and transport economics. We believe that the combination of the three would ensure that the board would be well equipped to do the job required of it and that it would be, and be seen to be, impartial.
I believe that the views of passengers are important and we expect local authorities to take proper account of them, both in developing their general transport policies and in drawing up detailed proposals for a quality contracts scheme. I am not convinced, however, that there would be a role for a passenger representative on the approvals board itself. That is because the board’s job would be to consider a local authority’s application to make a scheme and to reach a decision on the approval of it. In reaching that decision, the board would need to consider whether the authority had observed due process, to ensure that the consultation exercise had been carried out properly and that proper account had been taken of the views of consultees. Within that process I would of course include passengers.
The board would also need to reach a judgment as to whether the scheme as proposed by the authority would indeed satisfy the public interest criteria prescribed in the legislation. That would be likely to require analysis of the case put forward by the authority and we believe that to do that well, the traffic commissioner should be supported by appropriate experts. I am not convinced that a passenger representative would necessarily have the appropriate expertise to assist the board in the particular job that we have defined for it.
The case put forward by the authority is obviously likely to contain a detailed economic analysis, hence the need for an economist. The proposals are also likely to contain projections as to potential passenger growth and forward transport planning. That could and probably would be for a period of up to 10 years, which is why we think a transport planner would be an appropriate member. We do not, however, expect the experts on the board to undertake a separate, almost rival analysis to the local authority’s, rather their role would be to confirm that the authority’s overall analysis was credible and based on sensible assumptions. The job we want the approvals board to do is very detailed and specific.

Ian Stewart: I wish to express a small amount of concern about the presumption that members of user groups may not have the skills to sit on such a board. I have to tell the Minister that the Friends of Irlam station, the Friends of Eccles station—known as Freccles—and the transport users group in Swinton and Pendlebury include people who are eminent in their fields, whether that be health, economics or transport. That should be considered before assuming that people on transport user groups or from the community do not have the skills to sit on such a board.

Rosie Winterton: I hope I can reassure my hon. Friend, because that point brings us to the panel of experts that the Secretary of State would appoint for people to be drawn from. It may well be that somebody involved in passenger user groups would also have the other areas of expertise that my hon. Friend has talked about. However, that goes back to the question of the approvals board having a specific task.
It might be difficult for local passenger representatives, who may have been involved in consultation on the scheme—we hope that would be the case—to fulfil the objective and impartial role that we want the approvals board to have. We have made it clear, as I said, that we want the scheme to be credible, and we do not necessarily want someone who might have been consulted on the original proposals as drawn up by the local authority. Indeed, to take that view might in a sense change the work of the approvals board, almost widening it beyond what we want to see. That is why, in response to the Transport Committee, we made provision for a traffic commissioner other than the commissioner for the local traffic area to chair the board, as the local commissioner might consider that his ability to act and to be impartial was impaired.
I hope that the hon. Member for Lewes understands why we cannot accept the amendment. As I said, I hope that the Committee accepts that it is not because we do not value the views of the passengers. We certainly want them to contribute to consultations on the drawing up of the scheme, but not in the position that the hon. Gentleman outlined.
I ask the Committee to reject amendment No. 62, which seeks a panel of 15 members. It is not appropriate to include that level of detail in primary legislation in case we need to change it. It could be difficult to predict how many applications to make schemes will be received. We might need to change the size of the panel, depending on its work load, and including it in primary legislation would restrict our ability to do so. However, I assure the Committee that we will be consulting on the detailed implementation of these matters later in the year, including on the draft guidance and the drafts of any necessary secondary legislation.
With that explanation, I hope that the hon. Member for Lewes will withdraw the amendment.

Norman Baker: One of the TEG notes that we received with the Committee briefing states that
“No draft guidance has yet been prepared regarding the way in which an approvals board would operate.”
I assume that is still the case. I look to the Minister to confirm that it is so.

Rosie Winterton: What the Committee has before it is the draft guidance put out in December to coincide with debates in the other place. It includes a section on quality contracts schemes, and it refers to some of the role of the approvals board. However, as I said earlier, we will be able to specify other matters in more detail, such as when the board might start considering appeals.

Norman Baker: I raised that point in response because it is important. The Minister puts a lot of stress and weight on what the approvals board will do. As we continue in Committee, it seems that more and more will rest on its shoulders.
The success or otherwise of what the Government want to do will be determined by how the approvals board is asked to work and works. If the Minister is right, the board will clearly provide a bulwark and a way to facilitate and reinforce transport authorities. If those of us who have concerns are right, it will act as a blockage; it will be an unhelpful part of the process. Either way, when we are putting so much stress on the approvals board, it is difficult not having the draft guidance. It is disappointing because the Bill has been through the other place and it is now most of its way through the Commons.
The Minister did not deal with a point that I made in my opening remarks, which was that not only would none of the persons on the approvals board be elected—we have been around that subject already—but none of them might even have relevant bus experience or use a bus. I am sure that it was not her intention, but a transport planner could be someone who sits and designs the trunk road network. Someone specialising in transport economics could be a person who carries out a cost-benefit analysis of the rail network. There is no guarantee that the persons appointed will have the necessary knowledge of, or sympathy with, what the ITA is trying to do.
I am sure that the Minister intends to appoint people with relevant expertise and who would facilitate the passage of the legislation, but let us suppose that a future Government, perhaps of a different complexion, were unsympathetic to the idea of quality contracts and wanted to thwart them or see them wither on the vine. I do not want to give them ideas, but it would be easy to put people on the approvals board who would not facilitate what local authorities wanted, but who received different guidance from the Secretary of State.

Rosie Winterton: I am sure that the hon. Gentleman has not forgotten, but I assume that he is talking about the horrific possibility of a Conservative Government. In that context, it would not matter who was on the panel because it has already been indicated that they would abolish the quality contracts anyway.

Norman Baker: A Conservative Government may have second thoughts and seek to kill the measure slowly. I do not want to be unpleasant to the Conservatives but, as a matter of principle, it is a sound approach to legislation to assume that the worst can happen whether it is thought that the worst is a Conservative Government or a Labour Government—indeed, some may even think it would be a Liberal Democrat Government, but how they could reach such a conclusion, I do not know. However, we must always base the premise on ensuring that processes cannot be manipulated by the Government of the day to thwart the idea set out in the Bill when it was first designed. I want to establish that point of principle.

Stephen Hammond: One thing that we can be sure about is that we shall not have to consider the possibility of a Liberal Democrat Government.
Given that the approvals board is so important, the lack of guidance or of a definition of that guidance in the Bill is a glaring omission, and it will be a considerable weakness unless we do something about it in Committee. I hope that the hon. Gentleman agrees with me about that issue.

Norman Baker: Possibly I agree with the hon. Gentleman more than he thinks. We certainly agree on that point. It would be helpful if the Minister could publish more detailed draft guidance before we discuss the Bill on Report. I do not know whether that is possible, but it would be certainly be useful for the House to have it.
In response to the arguments advanced by the hon. Member for Wimbledon, the Minister said that local authorities will take account of passenger views. They will indeed do that, but there is no guarantee that the approvals board will. However, the local authorities would have the final say under my amendment and that would cover the point adequately. It would not be covered if we left the final decision to the approvals board.
We ought to pick up the points made by the hon. Member Freccles about user group skills. He is right that members of Passenger Focus and other user groups have considerable skills and that we should not undermine them or regard them as a second tier. If the Minister is insistent on going down the road of appointing people herself, I hope that she will take into account the sensible points that have been made and ensure that we have a mixture of people with experience of user groups. If she is not able to accept the amendment, I hope that she will be sympathetic to the idea that one of the three people will at least have user group experience, passenger experience or bus experience and thus know what they are talking about.

Rosie Winterton: I just want to put it briefly on the record that obviously approvals boards could call other witnesses if they considered that not enough particular expertise was available to them. I assure the Committee that we want people who are expert in both transport economics and transport planning. It is difficult to prejudge every member of the panel, but of course we want them to have some expertise in the area. There is no Government desire to appoint people who do not know one end of a bus from another—that would be ridiculous.
The whole point of what the Government are trying to do is to make it easier for authorities to introduce quality contracts schemes. We would gain nothing by appointing people who are inherently hostile to them. The process is to ensure that authorities that want to go down that route will find it easier to do so. The proposals in the Bill, and the possibility of appeal to a Transport Tribunal, would give an authority the possibility of making an appeal if it felt that it had been unfairly dealt with, or that its points had not been taken into account.

Norman Baker: I am not entirely satisfied but, without delaying matters, I will leave it there and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen Hammond: I beg to move amendment No. 61, in clause 22, page 20, line 31, leave out subsection (8).
Clause 22 inserts a new section into the Transport Act 2000. We are going through the composition of the approvals board and, clearly, it is vital to ensure that the right people are on it. Subsection (2) states that a traffic commissioner will sit on the board and subsection (3) states that the commissioner will chair it. Subsections (4) to (7) state that the senior traffic commissioner will be charged with appointing the commissioner as chair of the approvals board and other such duties. All of that is fine and I have no issue with it.
This is a probing amendment, but I want to understand why subsection (8) is necessary. It states that if the senior commissioner is unable to appoint a traffic commissioner to chair the approvals board, the Secretary of State will appoint one. Given that those duties cannot be arduous, I would be interested to hear from the Minister in what circumstances she envisages such a measure would be necessary. Why would the Secretary of State be involved only in that particular duty and not in others? When we talked about the roles and duties of the senior traffic commissioner, there was no discussion about the Secretary of State being involved if and when required.
The whole thing is slightly tautologous. The senior traffic commissioner is required to consult the Secretary of State in all that he or she does. Furthermore, the Secretary of State is able to give guidance to the senior traffic commissioner, and the commissioner is required to have regard to that guidance. The Secretary of State will be involved in that work, so subsection (8) seems completely unnecessary. Will the Minister give us some explanation and examples of why she regards it as necessary?

Rosie Winterton: The amendment would mean that, in the absence of the senior traffic commissioner, the Secretary of State would no longer be able to determine the most appropriate traffic commissioner to chair an approvals board. The Bill provides for the senior traffic commissioner to decide which traffic commissioner should chair each board, and that would normally be the one with the most local knowledge of the area in question. As we have just discussed, it also provides for the commissioner to be joined by two other members drawn from a panel appointed by the Secretary of State.
As I said earlier, the draft Bill proposed that the approvals board would normally be chaired by the senior traffic commissioner. Having considered responses to the consultation, particularly from the Transport Committee, it is now proposed that the board is chaired by the traffic commissioner who has the most appropriate local knowledge, with flexibility for another traffic commissioner to chair it if, for any reason, the local traffic commissioner is unable to do so.
The intention is that the two independent experts who sit alongside the traffic commissioner should have expertise in transport economics and transport planning to provide the right balance. The Bill will remove the Secretary of State’s role in approving applications for a quality contracts scheme, as we said earlier, but the amendment would remove the provision allowing the Secretary of State to nominate a traffic commissioner to head a particular board, which is purely a backstop provision. It exists to cover eventualities, such as the senior traffic commissioner being absent or incapacitated. If that happens, the Secretary of State rather than the senior traffic commissioner will be able to appoint a traffic commissioner.
If the provision were not included, there might be long delays in setting up a board while we waited for the senior traffic commissioner to stop being incapacitated. I cannot support the amendment. I hope that I have shed some light on why the provision exists and why we do not want it taken out.

Stephen Hammond: I have listened carefully to the Minister.,

Rosie Winterton: It is very complicated.

Stephen Hammond: I am not entirely sure that it is, for a number of reasons. However, although I give notice that we may return to the matter on Report, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Rosie Winterton: I beg to move amendment No. 2, in clause 22, page 20, line 38, leave out subsection (2).
Clause 22 contains provisions concerning approvals boards for quality contracts schemes in England. In particular, it sets out the membership of approvals board, which will include, as we have said, a traffic commissioner and two persons drawn from a panel of experts appointed by the Secretary of State. The clause will also amend the Tribunals and Inquiries Act 1992 so that approvals boards fall under the general supervision of the Council on Tribunals. However, under the tribunal reform process being undertaken by the Ministry of Justice, the Council on Tribunals has ceased to exist. As a result, the provision in clause 22 relating to the Council on Tribunals is redundant, and the amendment will remove it from the Bill. This is a tidying-up amendment.

Amendment agreed to.

Clause 22, as amended, ordered to stand part of the Bill.

Clause 23

Practice and procedure of approvals boards for England

Stephen Hammond: I beg to move amendment No. 65, in clause 23, page 21, line 9, leave out from ‘The’ to end of line 10 and insert ‘regulations of the board shall include—’.

David Taylor: With this it will be convenient to discuss the following amendments: No. 66, in clause 23, page 21, line 20, leave out from ‘which’ to ‘any’ in line 21.
No. 70, in clause 23, page 21, line 41, leave out subsections (7) and (8).

Stephen Hammond: The origin of amendment No. 65 is my concern that the Secretary of State is being given powers to interfere in the affairs of the approvals board that are neither appropriate nor required. The Minister has said several times that she believes that the approvals board should be impartial, and has discussed the fact that it should consist of one traffic commissioner and two appropriately qualified and independent persons selected from a panel. That independence should not be compromised by unnecessary interference by the Secretary of State.
Clause 23 introduces further sections to the 2000 Act, one of which will empower the Secretary of State to make rules governing practice and procedure to be followed by the approvals board. It also empowers her to make rules
“generally for the carrying into effect of the powers and duties of any such board.”
Such rules might include the procedure for making applications to the board and for the acknowledgement of such applications, the procedure for notifying the relevant parties that an application has been lodged, and the time scales within which such parties might make representations to the board.
The Secretary of State may also prescribe the deadline for the board to reach its decision. However, if the board consists of people who are seen to be qualified and experienced, it should not require such instructions from the Secretary of State. The senior traffic commissioner appoints the traffic commissioner to chair the board and the role of the chair is to guide the board through matters of procedure. He or she would not and should not need the Secretary of State to assume that role and interfere with the board.
Furthermore, the phraseology used implies not only that this is general guidance, but that there is the possibility that it might be specific. If the Secretary of State was seen to tell the board what to do and when to do it, that would reflect badly on the perceived independence of the board, particularly in individual cases. The board should define its own procedures, and the independence of board should mean that the Secretary of State is not required to do so. Subsections (2) and (3) are necessary for the efficient running of the approvals board, but I contest whether it is the role of the Secretary of State to make such measures.
Amendment No. 70 also deals with the independence of the approvals board and with ensuring that it is not impacted by interference from the Secretary of State. Subsections (7) and (8) go even further and state not only that the Secretary of State can get involved in the procedural matters of the approvals, but that they can issue guidance
“concerning the carrying out by a board of its functions under this Part in relation to quality contracts schemes.”
Of course, the board must have regard to such guidance, but there is the possibility that a wholly inappropriate intervention or interference could come from the Secretary of State. That seems to defeat any object of having an independent board.
I will be listening carefully to what the Minister says about the independence of the approvals board and the reassurances she can give on whether there will be interference from the Secretary of State in general and particular cases.

Rosie Winterton: That is quite a helpful explanation of where the hon. Gentleman is going with the amendments. We were slightly puzzled because they seemed to be designed to eliminate the Secretary of State’s role in regulating or guiding the approvals board, which would make it entirely self-regulatory. There do not seem to be other amendments that specifically would give the approvals board a power to make regulations. All references to regulations in this part of the Bill are to regulations made by the Secretary of State by statutory instrument. We also retain the power for the Secretary of State to make procedural rules.
There are, no doubt, precedents for self-regulation, which is generally for judicial bodies. However, that is not appropriate for a body of this nature. The board will be chaired not by a judge, but by a traffic commissioner, who will have been appointed for a somewhat different set of skills from those of a judge.
The board will not be a permanent body of persons; different traffic commissioners will chair different boards and may select different board members from the panel appointed by the Secretary of State to support them. To get consistency of practice, we will depend on the Secretary of State setting out the rules and regulations that apply to the approvals board, and the Bill provides for that.
Amendment No. 65 would remove the flexibility in clause 23. Its purpose seems to be to ensure that provisions that might be included in procedural rules under proposed new section 126B(2) are included. Provisions in clause 23 will enable the Secretary of State to make rules on the practice and procedure to be followed by the approvals board and on the general exercise of the powers and duties of the board.
The legislation highlights four procedural matters that may be included. That is not an exhaustive list and it does not exclude rules being made about other, related matters should they prove necessary, nor will it be obligatory to make rules on the specified matters if, in the light of consultation, we conclude that they are unnecessary.
In short, the provision in the clause gives a strong indication of how we might wish to use the rule-making power, but there is a degree of flexibility, which would not be the case if amendment No. 65 were accepted.
Finally, amendment No. 70 would remove the Secretary of State’s power to issue guidance to the approvals board. That is intended to ensure consistency of approach between the variously constituted boards. The Department will consult on the guidance—it will not be imposed unilaterally—but placing the entire decision-making process in the hands of an as yet untried board would be an extremely great risk. It is not how we envisage the relationship between the Secretary of State and the approvals board. The measure is about not the Secretary of State dictating on individual cases, but setting general rules and guidance if necessary.

Graham Stringer: I am listening carefully to my right hon. Friend. Would she care to expand on that so that I understand better precisely what she means by “consistency of approach”? Does that refer to the administration and procedures in a tribunal or to the issues before it?

Rosie Winterton: Issues of the type that will be covered are set out in proposed new section 126B(2), which mentions
“provision about applications for approval to such a board...provision for an acknowledgement of the receipt of any such application to be issued by such person, and within such time as may be prescribed in the rules...the procedure to be followed in notifying persons consulted under section 125(3) that an application for approval has been received”
and
“provision as to the time within which any such person may make representations to the board about the application”.
In a sense, it is about the administration of the applications, but we feel that it is important to address some issues that were raised on the timing of the approvals boards and how long they might go on. It is important for the Secretary of State to be able to issue guidance and regulations, rather than leaving it to the board, as I explained.

Sitting suspended for a Division in the House.

On resuming—

Rosie Winterton: I was about to finish, but I will let the right hon. Member for East Yorkshire intervene.

Greg Knight: I am grateful. Can the Minister envisage circumstances in which the appeals board might want to award costs? Might that be one of the powers given it? I can only see the power being used in exceptional cases, but would she give the board that power?

Rosie Winterton: I do not think that would be an appropriate mechanism for the approvals board. The idea of the approvals board is to have the ability to go through the processes I stated. It would not seem appropriate in that situation for there to be cost implications. That would occur in more of a legal situation.

Stephen Hammond: I appreciate that the Minister wants a consistent approach and I accept that she wants to set the parameters in which procedure may be followed. It could have been done by self-regulation, but I understand the consistency of approach argument.
Although the Minister has broadly addressed my concerns in amendments Nos. 65 and 66, what worries me is what she said on amendment No. 70, which we are also discussing. If one reads the Bill, the current wording—
“concerning the carrying out by a board of its functions under this Part in relation to quality contracts schemes”—
implies that it would allow the Secretary of State to interfere in individual cases. That is what the wording currently implies. The Minister said that she would do something more on the procedures through the guidance, but I look to her to write into the guidance that there is no way that the Secretary of State can interfere in individual cases. I will be looking for that in the guidance, and ensuring that it is there.
I leave the Minister with that thought—if the provision is not in the guidance, I will seek to bring it back on Report. However, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Norman Baker: I beg to move amendment No. 157, in clause 23, page 21, line 11, leave out ‘approval’ and insert ‘consideration’.

David Taylor: With this it will be convenient to discuss the following: amendment No. 158, in clause 23, page 21, line 16, leave out ‘approval’ and insert ‘consideration’.
Amendment No. 159, in clause 23, page 21, line 22, leave out ‘approval’ and insert ‘consideration’.
Amendment No. 160, in clause 23, page 21, line 24, leave out ‘reach its decision’ and insert ‘publish its recommendations’.
Amendment No. 161, in clause 23, page 21, line 25, leave out ‘approval’ and insert ‘consideration’.
Amendment No. 162, in clause 23, page 21, line 26, leave out ‘reach its decision’ and insert ‘publish its recommendations’.
Amendment No. 163, in clause 23, page 21, line 27, leave out ‘approval’ and insert ‘consideration’.
Amendment No. 164, in clause 23, page 21, line 29, leave out ‘reached its decision’ and insert ‘published its recommendations’.
Amendment No. 165, in clause 23, page 21, line 31, leave out ‘reach its decision’ and insert ‘publish its recommendations’.
Amendment No. 166, in clause 23, page 21, line 33, leave out ‘reach its decision’ and insert ‘publish its recommendations’.
Amendment No. 167, in clause 23, page 21, line 40, leave out ‘approval’ and insert ‘consideration’.
Amendment No. 168, in clause 23, page 22, leave out lines 1 and 2 and insert
‘“application for consideration” means an application under section 125A for consideration of a quality contracts scheme;’.
Amendment No. 170, in clause 25, page 23, line 26, leave out ‘applications for approval’ and insert ‘quality contract scheme’.
Amendment No. 171, in clause 25, page 23, line 30, leave out from second ‘the’ to end of line 31 and insert ‘authority proposing to make the scheme’.
Amendment No. 173, in clause 25, page 24, line 14, leave out ‘, or to the approvals board for England,’.
Amendment No. 174, in clause 25, page 24, line 20, leave out paragraph (b).
Amendment No. 175, in clause 25, page 24, line 26, leave out paragraph (e).
Amendment No. 176, in clause 25, page 24, line 36, leave out subsection (4).
Amendment No. 177, in clause 25, page 24, line 41, leave out paragraph ‘or (e)’.
Amendment No. 178, in clause 26, page 25, line 1, leave out subsection (2) and insert—
‘(2) For subsection (1) substitute—
“(1) Once the appropriate national authority considers the scheme, the authority or authorities who proposed it may make it, with or without modifications, at any time not later than 6 months after the date on which the recommendations of the approvals board are published.”’.
Amendment No. 179, in clause 26, page 25, line 11, leave out ‘approvals board for England’ and insert ‘authority proposing to make the scheme’.
Amendment No. 180, in clause 30, page 28, line 28, leave out ‘approval’ and insert ‘consulting’.
Amendment No. 181, in clause 30, page 28, line 29, leave out ‘section 126’ and insert ‘section 125A’.
Amendment No. 182, in clause 30, page 28, line 32, leave out ‘approval’ and insert ‘consulting’.
Amendment No. 183, in clause 31, page 28, leave out line 45 and insert ‘Section 125A (consideration of proposed scheme)’.
Amendment No. 184, in clause 32, page 31, line 20, leave out ‘approval’ and insert ‘consulting’.
Amendment No. 185, in clause 33, page 31, line 31, leave out from second ‘the’ to ‘applied’ in line 33, and insert
‘authority proposing the continuation of the scheme’.
Amendment No. 186, in clause 34, page 32, line 13, leave out paragraph (a) and insert—
‘(a)
‘(a) for paragraph (a) substitute—
“(a) requires the consideration of the scheme by the consulting authority which published recommendations on the scheme in accordance with section 125A, and”.’.
Amendment No. 187, in clause 35, page 33, line 19, leave out paragraph (c).
Amendment No. 188, in clause 36, page 33, line 24, at end insert—
‘(2A) In subsection (1)(b) for “approval” substitute “consideration”’.
Amendment No. 189, in clause 36, page 33, line 27, at end insert—
‘(aa) in paragraph (e) for “approval” substitute “consideration”’.
New clause 5—Approval of proposed scheme—
‘(1) The Transport Act 2000 is amended as follows.
(2) Omit section 126 (approval of proposed scheme).
(3) After section 125 insert—
(4)
“125A Consideration of proposed scheme
(1) If, having complied with section 125, the authority or authorities wish to proceed with the proposed scheme, they must apply to the appropriate consulting authority for its consideration.
(2) In this Part “the appropriate consulting authority” means—
(a) where the area to which the scheme relates is in England, an approvals board for England; and
(b) where the area to which the scheme relates is in Wales, the Welsh Ministers.
(3) The application must include—
(a) the authority’s or the authorities’ reasons for wishing to make the scheme; and
(b) such other information as the appropriate consulting authority may reasonably require.
(4) The appropriate consulting authority shall give its opinion on the proposed scheme within 28 days of the later of—
(a) the application for its opinion; and
(b) the receipt of any further information requested under subsection (3)(b).
(5) The appropriate consulting authority may recommend modifications to the proposed scheme.
(6) Following receipt of the appropriate consulting authority’s opinion, the authority or authorities must take that opinion into account and may then proceed to—
(a) make the proposed scheme;
(b) discontinue the proposed scheme; or
(c) make the proposed scheme with modifications.
(7) If the authority or authorities propose to make the scheme with modifications, they must first consult such of the persons they consulted under section 125(3) as would in their opinion be affected by those modifications.”’.

Norman Baker: The debate is mainly about new clause 5, with the other amendments largely being consequential upon it, as are amendment No. 194, to which I referred on our debate on clause 19, and amendment No. 172 on clause 25, which only makes sense if read in conjunction with this string—otherwise it looks as though I am disempowering local authorities. It makes sense with this group of amendments. I give notice that, when we come to clause 25, I will not move amendment No. 172, because I am dealing with it here as part of this string—in my own mind at least. I also give notice that I would like to have a vote on new clause 5 in due course, which I assume will be at the end of the Bill.
I will briefly rehearse the reasons for tabling the amendments and new clause, before going on to what new clause 5 will do. The Minister and the Committee will know my concerns about the accountability of the traffic commissioners and the role that they have been given in the Bill. We still do not know how they are to be properly appointed or who they are to be—the guidance has not yet been produced. There is a question in my mind as to whether a body with that level of accountability should single-handedly make decisions about whether quality contracts schemes should go ahead. On balance, we need to try to enhance local democracy and accountability, rather than stymie it, as I fear the present Bill does. The Minister and I want to reach the same destination, but I am concerned that the system she is adopting is less democratic and, as I shall explain, too onerous to achieve the ends she wants.
My second issue of concern is that the approvals board is being asked to undertake functions for which it is not properly qualified. I mentioned in earlier amendments, last week, that I am not convinced that the traffic commissioners have sufficient experience of the day-to-day bus matters that passengers expect—whether buses are overladen and so on—which is their traditional role. The hon. Member for Manchester, Blackley raised an important point about double-hattedness in an intervention earlier.
I expressed concerns about what relevant experience might be applicable in the two experts whom the Minister wishes to put on the approvals board. I ask her to envisage, as we always should, what a hostile Minister could do with his or her powers if such a person came into office and could manipulate the system. The system that the Minister is creating will leave local elected bodies open to an unwelcome pincer movement from centralisation by the Secretary of State on one hand and an unsympathetic approvals board on the other. I do not think that is her intention, but the Bill in its present form creates that possibility.
There is also a related issue of whether it is appropriate in any circumstances for the approvals board to thwart what might be the democratic views of the elected ETA, ITA or whatever it will be called. We have discussed that, so I shall not rehearse the argument, but a parallel arose in my mind with the situation when the Governor-General of Australia sacked the elected Australian Prime Minister in the 1970s.

Rosie Winterton: Is that a parallel?

Norman Baker: It is, because there was an elected body that answered to the public at large and was mostly in line with the public, as a local council or an ITA would be, and an unelected person who nevertheless had authority over that body and exercised theoretical powers that were entirely inappropriate. That is the parallel.
The Minister has constructed a rather Heath Robinson approach of hurdles and safeguards, for reasons that we know very well—to provide legal protection to local councils, ensure that they can carry through their intentions in terms of quality contracts and minimise the risk of successful legal action. However, her proposals are flawed in this respect: bus companies that are threatened with a significant loss of revenue but have plenty of money to use at present will not hesitate to use every possible avenue to protect their position. It does not matter how many safeguards the Minister includes; they will still take that approach if they can.
Furthermore, for the bus companies it need not be a matter of winning but of holding up progress, using every legal opportunity to thwart the introduction of quality contracts and making more money in the period before the quality contract is finally approved by judicial review or other process. I appreciate the Minister’s intention of limiting that period, as she mentioned, but nevertheless I think that will be the intention of some bus companies—not all by any means, but one or two. Whatever she does, she will not achieve the end that she seeks.
Conversely, new clause 5 would not weaken the position. It would maintain the best of what the Minister is proposing in the legislation while enhancing local democracy, which many people in this room want to enhance through the introduction of better arrangements, particularly for quality contracts. The ITA will pass on to the approvals board its deliberations, which the approvals board will then have the right to thwart if it chooses. I appreciate that it might not do so, of course; it might act within the narrow confines that the Minister seeks to set. It might be entirely harmonious with the ITA, but nevertheless it can thwart the ITA if it chooses. It can interpret the public interest in a way that the elected representatives for that area do not. It may have a different view of the public interest, and it is therefore a challenge to the democratic local body. It might not take account of issues that are not written in, such as the environment and so on.
I suggest that the approvals board should be set up and that the expertise that the Minister wants to pull in should be enjoined and used productively. She spoke of the approvals board engaging in discussions with the ITA—that is right; it should be a harmonious exchange of views—but under her proposals, if a local authority proposes a scheme that the approvals board rejects either wholly or in part, the ITA might feel that it must exercise its powers of appeal and move to the next stage. That is written into the Bill in clause 22, I believe. 
Under my suggestion, the approvals board would be an important statutory consultee. It would deliberate on the same basis as the Minister seeks to do, and would return its thoughts to the ITA, which would have the final decision. The parallel that I made on Second Reading, which the hon. Member for Sheffield, Attercliffe made again today, is with the Environment Agency. The Environment Agency is an important statutory consultee on planning matters. It makes recommendations to planning authorities and regional flood committees. They do not have to adhere to the recommendations; they almost always do, but if members of those authorities identify an overriding public interest issue, which they feel that as elected people they must pursue, because that is what they were elected on or for whatever reason, they have the right to override the Environment Agency—perhaps not in total, but in a particular respect that they regard as important. That option of overriding in one particular respect is not available under the Minister’s scheme; her option is an appeal to the Transport Tribunal.
Any ITA seeking to exercise the power would have to think very carefully indeed. It would have to think about the legal risk arising from not adhering to the approvals board, and the financial consequences that might flow from that. It would have to consider whether the Transport Tribunal, which would still exist under the proposed system, will take the view that the ITA has been irresponsible in not following the approvals board advice. It would have to take into account whether there would be a problem further down the line if the matter went to the courts. As an elected local body, however, it would still have the right to say that its judgment was different to the approvals board, which had in this case got it wrong. Its members could say, “We must have the right as elected local people to take the decision, whatever the risks.” They would bear the risks if they got it wrong, but it is better that they get it right, than that they do not and can be effectively controlled, if it comes to it, by the decision of the approvals board. That is the suggestion that I am putting to the Minister.
The amendment would retain the expertise that the Minister wants for the approvals board. It would make the approvals board important in terms of the advice it gives to ITAs or councils when undertaking quality contracts; it would retain the Transport Tribunal option, which is the independent appeals process that the Minister rightly said has to exist; and it ultimately would retain the High Court and judicial review process, should somebody wish to go down that road. It would also remove one of the hurdles that I fear will make quality contracts unattractive to local authorities, which neither the Minister nor I want. It would legitimise the process by having the decision taken at a democratic level by an elected body, rather than by an unelected approvals board. With all due modesty, I suggest that my proposal is the best of both worlds and I hope that she will give it serious consideration.
The Minister recognises that there are rules for local authorities, for example on road charging, which we shall no doubt come to later in the Bill. The onus on local authorities with regard to road charging is rather less than what they can do with quality contracts. They have more freedom to act on road charging, and it might be argued that it is rather odd to tie them down on quality contracts, while allowing flexibility on road charging. Personally, I would allow flexibility on both. That is a particular view, but there is inconsistency on that issue in the Bill.
The Minister said earlier that the approvals board will be able to make modifications and she used that as a justification for her scheme. Under my proposal, the ability of the approvals board to make modifications would be enhanced because it would report back to the elected body, which might say that its suggestion was sensible and would take it on board right away. As the Bill stands, the approvals board may feel reluctant to impose its will on local authorities because it is not elected. If it could refer back to the ITA or the local authority with one or two suggestions, it might feel easier about making modifications and improvements to the scheme, and the ITA might feel easier about accepting them.
I hope that I have made the case for my alternative suggestions. I am not being difficult, but the Minister will recognise that keen voices on the Labour Benches are questioning this part of the Bill and the approvals procedure. I am keen to find a solution that maintains the integrity of what she wants, but provides extra democratic legitimacy, and, with respect, new clause 5 would achieve both those ends. I hope that she will consider it sympathetically, if not today, on Report when she could, if she does not want my new clause, introduce a similar provision.

Graham Stringer: I will try not to repeat any of the arguments made this morning, and will be as brief as possible because time is moving on.
My first point concerns the role of traffic commissioners on what would be an advisory body under the amendment, and an appeals body under the Bill. When the Select Committee considered the role of traffic commissioners in this area, it listened carefully to the senior traffic commissioner and the traffic commissioner for the north-west of England who appeared before the Committee. They were primarily concerned with the burden on the senior traffic commissioner and said that it should be spread on the basis of time and local knowledge. That was the reason for the recommendation, and in that context it was a good one because it would improve existing provision.
Having thought about the matter and read more as the debate has continued, it seems that the logic, from the point of view of the Minister and of the hon. Member for Lewes in the amendment, is that the traffic commissioners look increasingly odd in the role. Their normal job is to adjudicate on whether a registered bus service complies with its registration or whether the operators are doing something that they should not be doing. They have in effect a quasi-judicial role, and putting them in the position of transport experts and allowing them to decide whether a scheme is in the public interest is stretching the definition. The hon. Gentleman would say that that is making them wear two hats—and some barristers would say that it is forcing them to sit on two stools—but in simple language they may experience a conflict of interest. My conclusion is that whatever the scheme, they are probably not the right people to be there. That is the specific point I wished to make.
The general point made by the hon. Gentleman has weight, as I said this morning. If we want to ensure that the people making decisions on what will improve public transport are elected local people, and give the electorate the opportunity to say what they want and to say in elections which schemes they want, there are three, not two, alternatives. There is the alternative of no appeals body, with the local authority’s integrated transport authority getting it right or not getting it right, with aggressive pressure from the bus companies operating as a force to ensure proper compliance with both procedure and the law. There are the alternatives of narrowing the appeals body down to dealing just with procedure, and the proposals of the hon. Member for Lewes.
I hope that my right hon. Friend the Minister will listen carefully to the arguments on those three points, and consider introducing proposals on Report to enhance the role of elected councillors by leaving the initial decision on whether to go for the scheme and the final decision on what scheme to choose up to them. That is pretty fundamental politics. In looking at the details, and not just the role of the traffic commissioner, I have thought carefully about the membership of the committee and what it really means. Who are the experts? Are they professors of transport? If one goes to any conference on transport matters, there is not one view from the experts. Professors of transport vary in their views as we vary in our views round this room. The most free-market professor of transport is from Oxford and he would say, as would the hon. Member for Wimbledon, “This is a load of nonsense. Leave it up to the market completely.” Professors from University college London and Edinburgh would say, “This does not go far enough. There must be more regulation and restriction.” The same is true of traffic planners and others, so how will the experts be chosen?
When it comes to looking at what is in the public interest, the professor from Oxford would say, “None of this is in the public interest. Leave it to the market.” Other professors will say X or Y. My point is simply that it is impossible to find a professor who does not have a value-laden background that he will bring to the party.

Greg Knight: But surely, in the scenario that the hon. Gentleman is painting, the free market professor, who wants nothing to do with this system, would refuse to serve. In practice, only those who believe in the integrity of the process will allow their names to be put forward.

Graham Stringer: That may or may not be true. If it is, it makes the point that we will not find an expert from outside, but only somebody who agrees with the values in the scheme. On looking at the detail of the proposal in that way, one can see that it argues that elected members should take that responsibility. The same thing is driving this Government as drove the previous Government. There are lots of failures in local government and possibly even more in central Government. Governments, under whichever political party, have the drive that says, “If we have the right experts or the right quangos, they will advise us correctly and we will not make the mistakes that are usually made in central Government and local government.”
Having looked at how quangos operate, I must say that they come and they go. The Learning and Skills Council has been and gone. It was introduced to replace central Government and local authorities in funding further education, but now it has gone. I think that the same applies here and that argues very strongly that we should find a way through. I appeal to my right hon. Friend the Minister to find a way through that will give primacy to local democracy, whichever of the three paths we go down. We could go down some variation on one of those or down a fourth way, if she can think of one. That would make a lot of hon. Members of all parties happy, including some from the Conservative party who have a genuine belief in local democracy.

Rosie Winterton: As my hon. Friend the Member for Manchester, Blackley and the hon. Member for Lewes have said, the amendments relate to the discussion that we had earlier. I assure the Committee that I have listened very carefully to the points that have been made on this issue. I hope that there is recognition that in the Bill we are trying to create greater flexibility for local authorities to introduce quality contracts if they wish. The Secretary of State can be removed from the quasi-judicial role occupied at the moment, which means that there is very little ability for the Department to give advice, if required, on the issues about quality contracts. There is a real risk of judicial review, and the hon. Member for Lewes set that out very clearly. It is therefore incumbent on us to try to find a way of protecting local authorities from the possibility of judicial review, to give them certainty to go forward with schemes if they wish to do so.

Ian Stewart: Am I hearing right? Does that mean that there is further scope for discussions with local authorities and transport authorities on some of these issues?

Rosie Winterton: I have outlined the principles. In Committee, we have been able to say that there is agreement on the various issues that I have just talked about. However, I will come back to the point that I believe that the process that we have outlined in the Bill is the right one to give the greatest legal certainty to local authorities and the greatest protection about judicial review. I hope that what I have been able to do today, particularly outlining some of the narrow areas that we expect to be covered, is helpful.
I will just make one further comment before I conclude because, as I said, I do not particularly want to rehearse all the arguments that we had earlier. The proposition by the hon. Member for Lewes—[Interruption.] I might have got that one wrong; he has gone all red. His proposal was for the approvals board. My observation—and I think that he touched on this issue himself—is that if the members of the approvals board decided that they were going to say, in the way that he set out, “This scheme is totally wrong, we do not agree with it and it should not even be considered”, and the local authority decided to go ahead with the scheme, the problem for the local authority would almost be enhanced in terms of judicial review. That is one of the difficulties with the scheme that the hon. Gentleman outlined.
I have, of course, listened very carefully to a lot of the points that have been made today and I would not in any sense wish to indicate that I would not take them away and consider them; that is the point of the Committee stage. The discussions that we have had today have emphasised to me the fact that we need to have that certainty. These are not easy issues; it is not easy to find a way to give local authorities that kind of legal certainty and protection, which is important. That is why I ask the hon. Gentleman to withdraw his amendment.

Norman Baker: The new clause is the issue in which I am interested and I have already indicated that I wish to push it to a vote at the appropriate stage in proceedings. I am sorry to say that nothing the Minister has said has dissuaded me from that course. This is quite an important matter; in fact, it goes to the heart of how the Bill works. Without rehearsing all the arguments, let me just pick up on one or two of the points that the Minister has made.
The Minister says that she wants to build in legal certainty for local authorities. First, there is no legal certainty. As other hon. Members and I have said, the bus companies may choose to take legal action in any event. The Minister may minimise the risk of a successful legal action, but I do not think that she will minimise the risk of legal action and she certainly will not build in legal certainty, to use her words.

Rosie Winterton: I am sure that the hon. Gentleman will accept that obtaining leave to go to judicial review is much more difficult if a process has been followed in terms of an appeal, particularly a tribunal.

Norman Baker: Yes, I accept that, and the process that I suggest in new clause 5 would build in near enough the same certainty that the Minister has provided. It would keep the Transport Tribunal. It would keep the tribunal to which she referred as an independent body to consider decisions, and it would allow an approvals board to provide expert advice to the relevant transport authority. She is trading off what she regards as greater legal certainty against a loss of democratic accountability, and the loss of a workable, attractive scheme for something much less desirable. I am tempted to say that the provision could have been an amendment tabled by the hon. Member for Wimbledon, but it would be rather unkind to characterise it in those terms, although it certainly makes quality contracts less workable.
I made the point myself—the Minister reiterated it—that if, under my scheme, a local authority were to ignore entirely the advice of the approvals board, it would be very foolish. It would be sensible to take advice from the approvals board. It is true that the authority leaves itself more open to judicial review if it refuses to accept the advice of the approvals board, but ultimately that is its choice. Its members are elected. They must make that calculation. They must weigh up what is important and less important for them. They must weigh up the risk to the taxpayer. They should take that decision; it should not be forced on them by an unelected approvals board. The Minister also made the point that she wants to remove the Secretary of State from quasi-judicial decisions. So do I, and nothing in new clause 5 would counteract that. I support the point about removing the Secretary of State from the process. It is not counteracted by new clause 5.
The hon. Member for Manchester, Blackley set out three alternatives, but we did not hear the Minister talk about looking at those again on Report, although both he and I asked her to do so. The most we got was an assurance that she would take the points away and consider them. I do not think that that constitutes looking at the issue again on Report. I do not wish to over-egg her comments. If she did mean that she will look at the issue again on Report, that is very welcome. If she did not quite mean that, that is less welcome.
There is a fourth alternative, which is an amendment that I tabled for consideration later in Committee. It would remove the Transport Tribunal, which is one way of removing another hurdle. If I am honest, it is a far inferior amendment, because it would take away the tribunal process, but it would limit the number of hurdles. I prefer new clause 5 to the removal of the Transport Tribunal, but that is a fourth alternative, which we will come to in due course.
With respect, I conclude that the Minister needs to think again, because salient arguments have been made by a number of hon. Members, not least from her own party, about the problems with the present arrangements regarding democratic accountability. The new clause 5 alternative offers her a way forward. I hope that she will take it away and look at it again seriously, and return on Report with a provision that meets some of the points that hon. Members have made. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.
Further consideration adjourned.—[Mr. Watts.]

Adjourned accordingly at eleven minutes to Seven o’clock till Tuesday 6 May at half-past Ten o’clock.